Gift card purchases could help small Canadian businesses cope with COVID-19: experts

As a novel coronavirus outbreak spreads across the country, Canadians rushing to stock up on groceries and other essentials are being encouraged to add something else to their shopping carts: gift cards from local small businesses.

The companies and organizations promoting such purchases say gift cards offer a quick injection of cash for the businesses expected to be hit hardest by the virus known as COVID-19 a quick injection of cash. It will come in handy as they temporarily close, see their inventory dwindle or have to figure out how to pay workers and bills with less income.

“There are tons of businesses that are going to be really having their beginning of the year really gutted as a result of the increasing cost of self-isolating,” said Dan Kelly, the president of the Canadian Federation of Independent Business, which represents 110,000 small and medium businesses across the country.

“If you’re a small hair salon nail salon trying to hang on during this difficult time, the future of your business may be in jeopardy, so buying a gift card or booking a service a few months in advance can be really really helpful signals to the business owner, that brighter days are around the corner and they should try to stick it out.”

There are 1.14 million small businesses in Canada, accounting for 97.9 per cent of the country’s employers, according to Statistics Canada data from December 2017.

Those in the food industry typically grapple with low margins, while small businesses across all sectors often face increasing rents, rising supply costs, regulations necessitating wage hikes and trouble competing with large enterprises that have bigger budgets and more of a safety net.

It’s a situation Type Books, an independent bookstore with three Toronto locations, can sympathize with.

Kyle Buckley, the manager of the Queen Street location, said Type Books closed its doors to foot traffic on Monday, but would be accepting phone orders and making curbside deliveries to Toronto’s west end.

Type Books was also suggesting fans of the store support it with gift cards.

“We think it’s important to take care of each other…and a lot of the time that means people whose businesses or whose livelihoods because of their work are really drastically affected by closures and people staying home,” Buckley said.

That sentiment also appeared on social media.

The Alpine, a mountain lodge-themed bar in Toronto’s Junction neighbourhood, tweeted that phoning in a food order for pickup or grabbing a gift card is appreciated because “rent in our beautiful building ain’t cheap, and we are cancelling some, if not all of our scheduled events.”

The Storm Crow — a business behind science fiction-inspired bars in Vancouver and Toronto – sweetened the deal by throwing in a $5 “loot card” for anyone who shells out $50 on a gift certificate.

But not all small businesses can rely on the gift card idea.

Tour Guys and Ontario branches of Urban Adventures, for example, offer free walking tours in several cities, but ask that guides be tipped. Despite having a low overhead, both businesses are being hampered by closed borders being closed and suspended air travel, said owner Jason Kucherawy.

The companies have about a dozen guides, including several who are artists. They have seen several cancellations recently and had to block tourists from booking walks in coming weeks.

To show support for his companies, Kucherawy said it would be helpful to book a tour in advance, but only “once they feel comfortable planning their travel again.”

For businesses without gift card options, Kelly recommends calling and asking them how you can best support them.

Sometimes it’s as simple as making a dinner reservation for a few months from now. Other times it’s not cancelling an order you made earlier in the year.

“I heard one great example of a bar mitzvah that was cancelled, and the family that had booked the caterer still took delivery of all the food and then had it delivered to all of their friends,”said Kelly.

Canada has reported more than 320 cases of COVID-19, but the global total is much higher.

Those found to have the virus typically experience mild or moderate symptoms, such as fever and cough.

The vast majority recover, but for some, including Canadians aged 65 and over and those with compromised immune systems or pre-existing conditions, the illness can be much more severe.